Politicians should stop using a "carrot of higher
graduate earnings" to justify raising student fees or freezing repayment
thresholds, say campaigners. Those who do "should be charged with gross
mis-selling", says Angus Hanton, co-founder of the Intergenerational
Foundation (IF) lobby group. Having to pay back student debts will wipe out any
graduate premium for most professions, claims the IF in a report. The report points
out how successive governments have used the graduate "pay premium"
to justify them. The premium is the amount of extra money it is estimated a
degree can help graduates to earn over the course of a lifetime. The report
says that in 2002, ministers put it at £400,000, but recent estimates have been
more modest at about £100,000. There are wide variations between the sexes and
between subjects and institutions, it adds. It argues that, while for somebody
who gets an Oxbridge first, the premium figure of £400,000 "may still hold
true", it is much lower for non-Oxbridge graduates. "The increasing
number of graduates... is further undermining the value of a degree," it
adds, with some previously low-to-median paid posts now requiring degrees. "Our
research proves that the current £100,000 graduate earnings premium so often
touted equates to an 'annual bonus' of just £2,222 over 45 years of work and is
wiped out once National Insurance and income tax are taken into account. "Furthermore,
the premium is simply not enough to cover the interest accruing on the average
loan. "The current system is fuelling a self-perpetuating debt-generating
machine which short-changes young people," argues Mr Hanton. The authors
say a graduate who borrowed the maximum for tuition fees and maintenance would,
with interest, owe £53,000 after three years. In addition, unlike most ordinary
loan agreements, the terms and conditions of student loans can be changed
"at any moment without debate and without notice", they add. They
point out that the government has already broken a promise that the income
threshold for repayments would increase with average earnings from April 2017. Instead,
it will be frozen at £21,000 for five years, then Chancellor George Osborne announced
in November 2015. BBC NEWS

Councils must resume
house building role, says LGA

Councils should be given the chance to resume their
"historic role" as house builders to ease an affordable housing crisis,
their lobby group says. The fall in home ownership among the young and rising
rental costs has led to some calls for councils to step in to increase the
supply of homes with a new building programme. Between the late 1940s and late
1950s councils built more homes than the private sector. Local authorities were
building 100,000 homes a year up to the late 1970s, but the election of
Margaret Thatcher's Conservatives in 1979 led to a fall in housebuilding by
local authorities. In the year to the end of June, local authorities built
1,500 homes in England out of a total of 131,370 - that is just over 1%. The
need was even greater following the economic uncertainty caused by the UK's
vote to leave the EU, the Local Government Association (LGA) said. Peter Box,
LGA housing spokesman, said: "The private sector clearly has an important
role to play but the reality is that it cannot build the homes we need on its
own, and will likely be further restricted by uncertainties in the months and
years ahead." A separate report from the Centre for Economics and Business
Research suggests that "tremors" from the vote to leave the EU will
not prevent the average UK home costing about £40,000 more in five years' time.
This would push up the average UK house price from £194,000 in 2016 to £234,000
in 2021, it predicted. BBC NEWS

IMF admits disastrous
love affair with the euro and apologises for the immolation of Greece

The International Monetary Fund’s top staff misled their own
board, made a series of calamitous misjudgments in Greece, became euphoric
cheerleaders for the euro project, ignored warning signs of impending crisis,
and collectively failed to grasp an elemental concept of currency theory. This
is the lacerating verdict of the IMF’s top watchdog on the fund’s tangled
political role in the eurozone debt crisis. The three main bailouts for Greece,
Portugal and Ireland were unprecedented in scale and character. The trio were
each allowed to borrow over 2,000pc of their allocated quota – more than three
times the normal limit – and accounted for 80pc of all lending by the fund
between 2011 and 2014. In an astonishing admission, the report said its own
investigators were unable to obtain key records or penetrate the activities of
secretive "ad-hoc task forces". “Many documents were prepared outside
the regular established channels; written documentation on some sensitive
matters could not be located. The IEO in some instances has not been able to
determine who made certain decisions or what information was available, nor has
it been able to assess the relative roles of management and staff," it
said. A sub-report on the Greek saga said the country was forced to go through
a staggering squeeze, equal to 11pc of GDP over the first three years. This set
off a self-feeding downward spiral. The worse it became, the more Greece was
forced to cut. The result is that nominal GDP ended 25pc lower than the IMF’s
projections, and unemployment soared to 25pc instead of 15pc as expected. “The
magnitude of Greece’s growth forecast errors looks extraordinary,” it said. The
injustice is that the cost of the bailouts was switched to ordinary Greek
citizens – the least able to support the
burden – and it was never acknowledged
that the true motive of EU-IMF Troika policy was to protect monetary union.
Indeed, the Greeks were repeatedly blamed for failures that stemmed from the
policy itself. This unfairness – the root of so much bitterness in Greece – is
finally recognised in the report. “If
preventing international contagion was an essential concern, the cost of its
prevention should have been borne – at least in part – by the international
community as the prime beneficiary,” it said. TELEGRAPH

Maintenance grants
scrapped for poorest students

From Monday, the grants, worth about £3,500, will be
replaced with additional loans that will have to be paid back at the end of an
undergraduate course, once graduates earn more than £21,000. Sorana Vieru, National
Union of Students (NUS) vice president, told BBC Breakfast: “It’s a disgraceful
change that basically punishes poorer students simply for being poor, so they
have to take a bigger loan than those students from privileged backgrounds. The
change, announced by the then chancellor, George Osborne, in 2015, was opposed
by Labour, which said it would hit those from low-income homes the hardest. Speaking
in January, Jo Johnson, the universities and science minister, said the
maintenance grant change “helps balance the need to ensure that affordability
is not a barrier to higher education, while ensuring that higher education is
funded in a fair and sustainable way”. GUARDIAN

Home ownership
falling in major English cities

The proportion of home owners dropped from 72% in April 2003
to 58% this year in Greater Manchester, it said. West Yorkshire, the
metropolitan area of the West Midlands and outer London have also recorded
double-digit falls. Explaining the falling rates of home ownership, Matthew
Whittaker, chief economist from the Resolution Foundation, told the BBC's Today
programme: "What we particularly have seen since 2002-03 is that incomes
simply haven't kept pace with house prices, so it's not just that house prices
have gone up.” The average first time buyer paid just under £30,000 for their
new home in the 1980s compared with more than £150,000 now, the think tank
said. The report follows recent data from the government's English Housing
Survey showing the total number of buyers has fallen by a third in 10 years,
and those who do buy their first home increasingly rely on the bank of mum and
dad for help. The Resolution Foundation's analysis of the LFS found that home
ownership in England peaked in 2003 at 71% of the population and had now
dropped to just under 64%. The think tank also confirmed that the fall in
ownership corresponded with a rise in renting from private landlords. The
proportion of private tenants rose from 11% in 2003 to 19% last year, it said.
In Greater Manchester, the move was more pronounced - rising from 6% to 20%
over the same period. While accepting that home ownership was rather a national
obsession, it pointed out that those in the private rented sector spent more of
their income on housing than their owners, and there was more insecurity in
short-term tenancies. BBC NEWS

Carphone Warehouse has been forced to pull an advert for its
monthly 4G mobile tariff packages, after the UK's advertising watchdog branded
it 'misleading.' The Advertising Standards Agency said the small print
contradicted the advert's claims, which it found could not be substantiated. Under
the advert, the small print said: 'UK's Lowest Price on pay monthly is based on
new connections on selected networks on 4G tariffs. UK's Lowest Price correct
at time of print and it applies to published prices ... Excludes all online
retailers without high street presence and other promotional offers ....'. Text
next to a number of phones pictured alongside the advert stated 'AT THE BEST
PRICE' and 'AT THE BEST PRICE WE'VE CHECKED.' Further small print at the bottom
of the advert said: 'If you find an upgrade or pay monthly deal for less at O2,
EE or Vodaphone, we'll match it and pay the equivalent of your first month's
standard line rental ....' The offer excluded 'all online retailers without a
high street presence', so shoppers were 'likely to be misled' by the advert,
the ASA said. The price promise also only applied to three competitors, namely
O2, EE and Vodafone, so the advert 'contradicted the overall impression that
Carphone Warehouse prices were better than all other retailers', the ASA said. DAILY MAIL

The Fed said Goldman Sachs had used documents, obtained by a
former Fed employee, to brief clients during presentations. Goldman Sachs has
already paid New York regulators $50m over the same incident. The case has
highlighted the issue of staff moving between big banks and the agencies that
regulate them. According to the Fed, a former Goldman Sachs senior banker
Joseph Jiampietro, asked a new, junior employee Rohit Bansal to obtain
confidential documents from the Fed, where Mr Bansal had previously worked for
eight years. Those documents were then used to advise small and medium-sized
banks on the Fed's decision making in 2014. Both Mr Jiampietro and Mr Bansal
were sacked after another colleague reported the incident to the compliance
department. BBC NEWS

Christian Candy has insisted he gave his brother Nick gifts
worth more than £200m out of family affection and respect for the dying wishes
of their late father — and not as part of an alleged plot to evade tax. The
largesse Christian handed to his business partner brother include a penthouse
apartment at One Hyde Park, where Nick lives with his pop singer wife Holly
Valance; the couple’s future family home, a grade II-listed mansion in Chelsea;
and £10m in cash. Loans from Christian’s business empire have also been used,
in part, to help Nick buy a £26m, 60-metre Italian yacht called 11-11. The
multi-millionaire brothers, who are Conservative party donors, have been forced
to provide a rare glimpse into their relationship — both business and personal
— as part of a bitter legal dispute over a loan to another property developer,
Mark Holyoake. They say Holyoake is making allegations about tax evasion to
force settlement of his claim and detract from business problems of his own. Witness
statements from Nick and Christian Candy were submitted to the high court in
London after questions were raised about how Nick came by his personal fortune,
and the role he played in his brother’s CPC Group. A highly profitable property
empire, CPC — which takes its name from Christian’s initials — is best known
for super-luxe London developments such as One Hyde Park, where the sale of
apartments brought in £2bn. GUARDIAN